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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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528

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480

TOPIC FREQUENCY

Us 14, Nancy Pelosi 13, Washington 11, Harry Reid 6, U.s. 6, Tim Geithner 5, S&p 4, Google 4, Eamon Javers 4, Citi 4, New York 4, John Boehner 3, Geithner 3, California 3, Eamon 3, Geico 3, The Treasury 2, Timothy Geithner 2, George Lucas 2, Charlie Rangel 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    November 29, 2012
    3:00 - 4:00pm EST  

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we leave you with this "street signs" faithful. the most painful video of the day. a man in georgia, the country, not the state, pulled an 8-ton truck with just one here. total distance, 17 feet. >> to you, sir, from all large-eared people worldwide, i salute you. >> thank you for watching "street signs," everybody. hi, everybody. good afternoon. we enter the final stretch. welcome to "the closing bell." i'm maria bartiromo at the new york stock exchange. some wild statements today about how far apart or close we are on the fiscal cliff. it's another day of fiscal cliff turns on wall street. >> yes, it is. welcome back. i'm bill griffeth. we're going to get to those wild statements out of washington in a minute.
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you can see when they happen when we show you today's chart. speaker boehner's comments pushed the market lower. then other comments brought them back a little bit. the dow is up just 45 points right now at 13,030. the nasdaq also trading higher today. last i checked, it was up 21 points. there it is at 3,013. that's about the high for the session. the s&p is up about seven points at 1416. >> a bit of a roller coaster ride today after fiscal cliff comments from both parties. >> eamon javers on capitol hill is following the drama, which changes moment by moment. >> absolutely, bill. it's been a bit of a roller coaster ride, as you say, on capitol hill with duelling press conferences today. follow along with me here on what each person said from each party and how that impacted the
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market, starting with speaker john boehner. here's what he had to say early in the day. >> despite the claims that the president supports a balanced approach, the democrats have yet to get serious about real spending cuts. and secondly, no substantive progress has been made in the talks between the house and the house over the last two weeks. >> so republicans accusing democrats of not being serious. what did the democrats have to say? well, listen to harry reid. >> republicans know where we stand. we've said it, we've said it, we've said it so many times. the president said the same thing. it's been weeks, at least two weeks, since we met at the white house. we're still waiting for a serious offer from the republicans. >> so neither the democrats nor the republicans are serious according to the democrats and the republicans. what's really going on here, guys? i think we should put it into serious context. the negotiation. both sides want more concessions
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from the other side than they're seeing right now. that's why you've seen these duelling press conferences. both sides trying to put the political pressure on the other to cave in here. we're not likely to see any real cave-ins any time soon on this. i talked to harry reid earlier today. i asked him whether or not tim geithner had brought a specific offer up here to the republicans from the president. he said no. no specific offer today. in fact, he said the president made the offer from the democrats two weeks ago, and that's the offer that stands now. so, guys, a very high-stakes poker game here on capitol hill right now. treasury secretary geithner meeting with nancy pelosi, the democratic leader in the house, as we speak. we expect to hear from her, probably not him, in about a half an hour. >> what is soon? no deal soon. we're 32 days away. this is just mind boggling. >> you mean it's going to go down to the wire? what a surprise, eamon. >> washington loves brinksmanship. they love deadlines. they're incapable, they've
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proven time and time again throughout history, they're incapable of coming to a deal before that deadline. my guess is, based on seeing these things before, that's where we're going here. right until mid to late december before we get a final deal. i think all of this jockeying right now is negotiating for political leverage and the wild swings in the dow that we've seen today, yesterday, and a couple weeks ago, those are going to be sort of where we're at throughout this negotiation. wall street needs to watch this stuff, but they need to really understand and separate the political rhetoric from what's really going on in these negotiations. >> all right, eamon. thanks very much. eamon javers with the latest there. of course, wall street is watching. investors hanging on every word here. let's find out how to invest amidst this volatility in today's "closing bell" exchange. >> todd, you of all people should know how this works. why don't they all just get together in a closed room, close
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the door, and not come out until they have a deal? i mean, all the public posturing, none of it is making progress on these talks. >> well, i do think we shouldn't listen to john mccain and we should agree to torture and torture these government officials. they locked themselves back in a room in the summer of 2011 and did nothing. we report as if this fiscal cliff were a bruce willis movie, an ast troid coming from outer space unexpectedly. this fiscal cliff was deliberately put in place. >> by these guys. >> by these people. >> on their watch. >> you hear harry reid go up there. the senate has been incapable of passing a budget for several years. >> four years. >> i'm not talking about the senate passing a budget and the house agreeing and the president sign. just that one chamber. >> you don't sound like you're hopeful they're going to get a deal done any time soon. >> i think the market is being
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complacent. i think there likely will be a deal before the super bowl in february. i'd say most likely. but those talks will break down before there's a deal. i'm not sure this market is prepared for a breakdown. >> christian, what about that? clearly, the market is not prepared for it because the market is hanging on every word from each side. what do you want to do in the interim as an investor? >> staid stai >> stay on the sidelines, mostly. the market doesn't like political disagreements. there's a lot of money sitting tight right now. we're seeing a lot of movement in the market based on thin volume. it is a good time to get into stocks you like for the long term. i take a slightly different perspective on this. this might be like y2k. in other words, there's an awful lot of noise and worry. when we actually go over the cliff, it may not be as bad as
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we expect. then the impasse might be broken. there might be more of a push to get things done. >> look at it this way. american investors, and international investors, myself included, have ridden the train of dividend paying stocks. if we go over the cliff and dividend taxes -- >> not so much. well over 60% of mutual funds are held in qualified plans. >> that doesn't matter. >> it does matter. >> 40% of the investors are going to be subject to 43.4% dividend taxes. those shares go down in price, and it affecting people who have pension plans. >> maybe, but a lot of people like insiders and other types of long-term institutions are not going to sell their stock based on a 15% dividend tax rate. >> you don't think they're going to sell if dividend taxes go to 44%? >> i don't. i'm in the minority here. the stock market has done better when the dividend tax rate was
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considerably higher than it's been for the last ten years. >> but 44%, christian? >> well, it is certainly a lot. a lot of it is tax shelter. it's not going to hit everybody and have quite the impact everyone expects. >> ron and rick, we haven't forgotten about you guys. how do you play this while we go through this volatile period before the end of the year? >> i think the market's finished discounting the fiscal cliff issue. we saw the selloff from november 7th until the week before thanksgiving. it was a 7.7% pullback. the stocks people wanted to harvest capital gains in were sold off, like apple. dividend stocks were sold off. if there's going to be a big differential between capital gains and dividend taxes, you're going to buy companies next year that are buying out. i think people are getting too pessimistic now. the market seems to be telling us more about what it's thinking, that it's looking past the fiscal cliff issue and
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focusing on the very, very decent and accelerating fundamentals of the u.s. economy. >> maybe, and that's just today, right, ron? >> been since last week. >> we were talking about the market really being so sensitive to any rhetoric out of washington. >> i'm not saying it's not hostage to headlines. we'll get intraday volatility. from the monday before thank giving until now, we have effectively wiped out the losses we saw post-election. >> rick, how do you see it? market complacency, too much angst, are we overthinking this? how do you read the market right now? >> i think that the low volume movements of the equity markets aren't really telling you any information. there's no way even in aggregate a market could decide what's going on in harry reid or john boehner's brain in anything is going on in begin with. if you look at treasuries overlaid on top of equities, until mr. boehner's comments, the treasuries have taken the big picture on all of this. they're not going anywhere fast. fiscal cliff is important, but
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there's a lot of issues for the next several years that are going to be important to the treasury market. once his comments were made, equities got a little volatile. you can see that was it. the treasury traders pretty much stopped trading, and it's been light volume ever since. >> but one issue, i guess, isn't there so much room to disappoint this market? given the fact the it is moving so much on any commentary out of washington, if we go over the fiscal cliff by december 31, is there a big opportunity for this market to sell off? it doesn't seem like it's priced in that we go over. >> maria, if we go over the cliff, sure, we're going to have a reactionary selloff. when you look at the fed now talking about qe-4, economic statistics are getting better, not worse. europe is slow e lily resolving issues. >> that reverses in the first quarter if we go over the cliff. >> it depends how we go over. if we go over for a couple days and they get a deal, it's fine. if this thing really breaks down, sure, that's not priced
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in. i don't think that's where we're going. >> you're from california, correct? >> i live there, yes. >> doesn't make you a bad person. >> i'm from buffalo too. >> it explains why he's stylish, right? well, i live in california. we voted to raise income taxes and sales taxes. california is, what, one-seventh of the u.s. economy. >> jerry browne's miracle. >> i'm going to get a bill as well as every other californian asking for money. >> what is your point? >> that will have a negative impact on the california economy and on the u.s. economy. so ron is right. there are parts of the u.s. economy are certainly improving, but there are other parts that have not yet felt a vice that's squeezing on them. >> all right. we got to go. the bell is going to ring shortly, i feel like. we got to go. thank you, everybody. appreciate it. we are heading toward the close and, really, the market is where it was before all the rhetoric
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came out on the cliff. the dow up 32 points right how it. >> we've heard some democrats made maye be willing to dive off that fiscal cliff. our next guest certainly is not following suit. find out what cuts he's willing to make. another potential cost saver could be ditching the paper dollar in favor of a dollar coin. congress is considering it. could our debt literally kill the dollar bill? we'll talk about that. and later on, i'll be talking exclusively to two of the nation's top ceo on how the fiscal cliff will impact their businesses. that's later on in "the closing bell." stay with us. back in a moment. [ male announcer ] if you suffer from heartburn 2 or more days a week,
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welcome back. the fight over the fiscal cliff heating up with both parties accusing the other of failing to offer substantial plans. >> to this point, that's right. without a deal, automatic spending cuts and higher taxes will kick in january 1st. that's something our next guest wants to avoid. we welcome back democratic congressman charlie rangel of new york. good to see you. welcome back. >> good to be back. >> we're at that awkward part of
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the negotiating process where nobody wants to be the first to step up, especially on the spending side. so do you want to be that person? can you give us some sense of where the democratic side would want to make those cuts in entitlements to get us closer to a deal? >> how in the world would you talk about cutting spending before you find out how much you have to spend? isn't this all about a revenue shortfall? the first thing we should do is find out, how much money can reraise, what is the gap, and what we can't do in terms of raising revenue we go to the cuts part. >> that's a great point. so let's do that. apparently if you raise taxes on the highest earners, that'll get you $31 billion. if you eliminate all loopholes and exemptions, that will get you $1 trillion. so given $1 trillion on the table and $31 billion just from the highest earners, what would
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you cut? >> well, marie, we have to look at make certain what's going to be on the board. i don't know whether social security is going to be there. there's certain things we're not going to do. we're not going to cut the benefits involved this medicare because the savings in medicare is involved in the affordable care act. the president already has that there. the savings there should be on the board. >> when we talk about cuts in entitlements, then, sir, where are we talking about makes further cuts? >> well, i don't know who's talking about -- are you talking about cuts in entitlements, but you aren't talking about cuts in providing health care. you talk about perhaps it could be with the providers. but you're not talking about the benefits on the side of this. i don't know, and nobody has explained to me, what role does insurance companies play in getting a sick person well? i mean, the money that you pay into them, i think that we're going to take a look at
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insurance companies. also in pharmaceuticals. there are big savings that could be negotiated. >> do you understand that, bill? i'm not sure i follow you. so we've got $16 trillion debt. we've got a deficit every year of $1 trillion or more -- >> i'm saying the savings are in pharmaceuticals. >> where are the cuts? >> we can cut by not paying the maximum price to the pharmaceuticals. the savings is located in that. i don't know how much money they've said we can raise in these other areas. social security is not a part of our deficit problem. so the only other two entitlements we got is how to detake care of the poor, and if we don't take care of the poor, it means additional expenses. >> would you be in favor of means testing medicare and social security? in other words, taking those wealthy americans who don't need those benefits and take them off
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those roles as a savings? >> there's no question that removing the cap for higher people that are in the higher income is one of the sources of income that i could support. no question about that. >> let me ask you this, congress pan. would you prefer top just deal with the revenue and forget about cutting at all at this point because of the slow economy? is that where you're headed here? >> no, no, no. >> so you do want to cut then? you do want to cut spending? >> we're going to have to do it. first of all, we have to find out what our target is going to be. if the target is going to be a mixture of cutting and a mixture of raising revenue, then we have to say we're not going to cut more than we have to cut, so how much money can we raise? it's ridiculous to believe that we can raise revenue without increasing the tax rates, even though the republicans say it. i say let them prove they can do it.
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mathematically, it's im -- >> even though it's only $31 billion if you raise the highest earners? that's not making a dent in anything in a $16 trillion debt. >> first of all, until you get something on the table and it won't be tax reform, we got loopholes that we can close. we got tax rates that we can raise. the amount of money that we can raise there will dictate. now what is the gap? then and only then do you start talking about cutting spending and the cost of cutting spending. if you're just whacking across the departments and agencies and sending people on the unemployment board, if you're just putting middle income people in the street without disposable income, if you make it impossible for them to buy things from small businesses, cutting is not the answer. >> let me get your take on one final issue there, congressman. that is, what if we do nothing? what's the cost of that? let's talk about unemployment in 2013. how bad will it be if we go off
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the cliff? >> it would be a terrible stain on the united states of america. if we didn't hear from our business community, not for profit community, our spiritual community, the folks that service the people, if they didn't become mad as hell and take this out of the hands of a handful of people in washington. we've gone too long and can't afford for our sky to fall. >> that's why we're asking you what to cut. we agree with that. >> congressman, good to see you. thank you for joining us today. appreciate it. >> thank you for having me back. >> you bet. charlie rangel of new york there. any moment now, we expect to hear from the democratic leader of the house nancy pelosi come out after her meeting with secretary geithner, who's been making the rounds on capitol hill today trying to hammer something out. it was after he met with tim geithner that john boehner made his comment same thing with
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harry reid. now we'll hear from nancy pelosi. we'll see if anything moves the markets she may say. that's coming up, so stay tuned for that. >> i don't mean to make light of this, but i feel like we're in an snl skit. >> i have said it all week. just get these guys in a room, close the door, and don't come out until you have a deal. what's with all the public posturing? because they're talking past each other. >> why is the public paying these guys if they're not -- maybe, what about not paying them until we see a deal? 40 minutes before the closing bell sounds for the day. we have a market well off the highs. up 77 was the high. we're showing a gain right here of 27 points. >> slowly coming lower here. meanwhile, microsoft is escalating its war with google. listen to this. >> can you spot the ads in the google shopping search results? it's easy. they're all ads. >> microsoft warning against getting what they call
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scroogled. is there a vaccine for that? we'll explain what it means. don't worry, you don't need to ask the kids to leave the room. we'll get that. speaking of shopping, are luxury retailers like burberry seeing any impact on the looming fiscal cliff? we'll talk with the ceo later on "the closing bell." we're back in a minute. can i help you?
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make end roads against google. john fortt with the story. >> microsoft is launching an attack on google shopping. the argument, because merchants now must pay to list there, google's prioritizing its pocketbook over accuracy. you're getting scroogled. here's microsoft's ad. >> can you spot the ads in the google shopping search results? it's easy. they're all ads. sure, they say your search is sorted by relevance, but the truth is google sells their shopping results. they scroogle you by defining relevance as how much they're getting paid. don't get scroogled. you may be missing out on the best prices and highest quality products. for an honest search, try bing. >> but the charges might not hold up. i found google's product results to be higher quality than bing's in my searching today. fewer bogus listings. and google's system doesn't exactly charge merchants to list
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items. it charges them for clicks, which amounts to a tax. it's really not that different from fees ebay and amazon charge to third-party sellers. >> thanks, john. >> getting ugly out there. so will microsoft's attack ads work? and which of the two is the better investment? let's start talking numbers on that. on the technical side, ennis tanner. on the fundamentals side, patty edwards. good to see you both. thank you for joining us today. on that technical side, ennis, who do you like better, microsoft or google? >> i really don't like either of these companies. i think they both face significant head winds. let's get to the charts first. microsoft, if we look at the three-year chart, what's funny about this chart is if you took it back ten years, it wouldn't look that different. the stock's been stuck in a range for a significant amount of time. it's in the middle of the range. i see support at 24 to 26. so there's a little bit less downside.
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that's not necessarily a bullish argument. if we look at google, on the other hand, the chart looks more vulnerable to a significant drop over the next six months, to me. so google's lifetime chart, if we can bring that up, you can see that breakout above the $750 high in 2007. now that we sold off failed moves result in fast moves. i think you might see a fast move lower on google. >> if we pin you down, you like microsoft. stunningly, patty, you take google's side. >> yes, i'm living in microsoft's backyard, but i have to tell you, the product reviews on windows 8 are not coming through that great. everyone i've talked to who has bought a windows phone has iphone envy. in fact, a lot of the engineers at microsoft itself have iphones. i don't think you're going to get a lift out of this. i love the fact microsoft ways you a dividend, but it's not enough to get me to buy that stock when i can't see the product innovation really taking flight for at least a year because they have a lot of bugs
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to work out of this windows 8 thing. on the other hand, management over at google has shown they know how to get revenues. they are being innovative in hour they're doing their search results. you have the ad revenue there. and you have a 14% potential upside in growth. >> i'm with patty that iphone is going to win this battle, but that means that android is going to lose as well. i don't really like either one too much. i think google has more downside. >> you know, i disagree. i think android is doing exactly what they need to be doing, and windows phone will be the one who ultimately loses. >> all right, folks. thank you for your thoughts today on one of the great battles going on right now between microsoft and google. see you later. >> all right. we are waiting on nancy pelosi. she's going to make public comments shortly on the fiscal cliff. she's been meeting with secretary geithner. i want to hear from her in terms of how close or far the two sides are from a deal on the fiscal cliff. we'll bring you that live once nancy pelosi takes to the
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podium. stay with us on that. meanwhile, 30 minutes before the closing bell sounds on wall street. we have a market well off the highs of the day as we approach this final stretch. the dow jones industrial average up about 20 points here after being higher by 77 earlier in the session. will it be a happy holiday for luxury retailers, or are fears of the fiscal cliff forcing consumers to cut back there as well? the ceo of burberry will give us her take. and who will buy twinkies and other well-known hostess brands? big developments on that front today. find if you'll be able to buy a twinkie. you're watchi ining "the closin bell." stay with us. tdd# 1-800-345-2550 you should've seen me today. tdd# 1-800-345-2550 when the spx crossed above its 50-day moving average, tdd# 1-800-345-2550 i saw the trend. tdd# 1-800-345-2550 it looked really strong. tdd# 1-800-345-2550 and i jumped right on it. tdd# 1-800-345-2550 tdd# 1-800-345-2550 since i've switched to charles schwab... tdd# 1-800-345-2550 ...i've been finding opportunities like this tdd# 1-800-345-2550 a lot more easily. tdd# 1-800-345-2550 like today, tdd# 1-800-345-2550 i was using their streetsmart edge trading platform tdd# 1-800-345-2550 and i saw a double bottom form.
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welcome back. there's a live shot of the podium in washington. we are waiting for nancy pelosi to come out to discuss her meetings today on the fiscal cliff. timothy geithner out speaking with ms. pelosi among others talking about ways these two sides can come together. as soon as nancy pelosi takes to the podium, we'll take you there live. >> eamon javers standing by there in washington. what can we expect to hear from her? all day long wae've been hearin
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from both party sides. i can imagine we'll hear the same thing from nancy pelosi, the minority leader in the house. >> i think you're right. obviously the democrats have been saying the republicans aren't serious. the republicans have been saying the democrats aren't serious. i've been trying to get a sense of what she might say. they're very aware the movements if the market today have been very much pegged to what these members of congress are saying. whenever whatever we hear her say, you can be very sure she's saying it intentionally and clearly and be aware it might have a market impact. they're bearing all that in mind as they craft the comments here. what we're doing now is waiting for her meeting with tim geithner to get over with. she's going to be speaking just around the corner from where we're standing right here. we're not expecting to see tim geithner come out, although, you know, we can always hope, right? that's why we're here. >> i guess we all feel a little bit like charlie brown and the football. i mean, we'd like to think that as something as important as
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this negotiation that we might see a little progress as we get through the public posturing, but no, we got to go through the public posturing to identify the differences, to point the fingers before we can get down to substantive talks. >> look, public posturing is hugely important in washington. what politicians do. but i would caution you not to assume that there's no progress being made. you know, behind the scenes, there is paper changing hands between both sides. you know, we saw neighbors, the president's white house liaison up here on capitol hill walking back and forth between harry reid's office and mitch mcconnell's office today. we know they're speaking to one another. we don't know what they're saying. this is very much a negotiation. john boehner was offered the opportunity earlier today at his press conference to say that talks had broken down or he was walking away from talks. he kind of laughed that question off and said, no, no, no, that's not what i'm saying. so publicly, we're going to see a lot of bluster.
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behind the scenes, they are talking. >> all right. it's still windy in washington right now. >> thanks, eamon. see you later. we're in the final stretch of trading. this market has given up much of an earlier rally. up about 28 points on the dow industrials after being up 77 points earlier. >> deal or no deal? there's always a way to make money in the markets. our pros will tell you how you should be investing ahead of this mess being cleaned up in washington. compromise. what a concept. >> we'll see. then find out how barry sternlicht is allocating capital today. he'll join me at 4:10 today. back in a moment. melons!!! oh yeah!! well that was uncalled for. folks who save hundreds of dollars switching to geico sure are happy. how happy, ronny? happier than gallagher at a farmers' market. get happy. get geico. chances are, you're not made of money,
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this is the only thing we've ever wanted to do and ink helps us do it. make your mark with ink from chase. is what drives us to broadcast the world's biggest events in 3d, or live to your seat high above the atlantic ocean. it's what drives us to create eco-friendly race tracks, batteries that power tomorrow's cars, nearly indestructible laptops, and the sustainable smart towns of the future. at panasonic, we're driven to make what matters most better. just another way we're engineering a better world for you. when we got married. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.
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no substantive progress has been made in the talks between the white house and the house over the last two weeks. the white house has to get serious. >> we're still waiting for a serious offer from the republicans. republicans know where we stand. we've said it, we've said it,
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we've said it so many times. >> i think all of us today are confident we can reach a bipartisan agreement by christmas time. >> not finished yet, either. nancy pelosi is still to come. we'll be hearing from her shortly on capitol hill following her meeting with treasury secretary tim geithner, who's been making the round today to try and find some common ground in all this. as you saw there, every little tiny comment has been moving the markets again today. how can investors navigate these volatile times? our next guests give us thundershower best strategies ahead of the fiscal cliff. >> joining us right now is craig hodges of the hodges fund. michael is overseeing $17 billion in assets. jeff cox, cnbc.com's senior writer, is with us as well. you have all that money under management. what is your fiscal cliff strategy? what if we go over the cliff? what does that mean in terms of your behavior, how you allocate
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capital? >> well, i think in the short term if we go over the cliff, that means that probably bonds will do better. we will likely have an economic slowdown. and with further fed subsidies on interest rate, i would expect bond prices to sort of stay where they are, maybe even increase a little bit more with yields going down. in the longer term, though, i think investors need to focus on the fact that this is going to get resolved one way or the other. whether it's through negotiation or at worse you go over the cliff and you have higher taxes and less government spending. with the revised gdp number today, revised upwards, you know, the economy is more likely to absorb a decline in economic activity with a higher gdp number. so i think investors need to look at their own situation. if you're going to sell, now is is a good time to sell. rates are low. if not, don't adjust your entire investment philosophy just because of the fiscal cliff. >> craig, you're the patient value investor. are you standing aside, waiting
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for this to resolve itself? >> you know, we use the volatility, the fiscal cliff to buy great businesses that are on sale. you know, the fact remains that the stocks are extremely underowned like i've never seen. i saw the other day, in 2006 pensions and endowments had about 60% of their enveinvestme in equities. that's down to under 35% in most cases. you also had four years of the much yul fund li mutual fund liquidations. i don't think the market is at great risk here. stay with domestic companies. stay with companies that have real high barriers of entry that are kpacheap. if you get caught up in the day to day news flow, you can get whipped in and out. the fiscal cliff will be resolved, whether it's two weeks or a month and a half. the market will move around, but long term it looks good. >> the question s how will it be
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resolved? jeff cox, already we are seeing a movement on the part of investors to say, if i'm sitting on a position where i've made money, i'm going to sell now given the fact i've been taxed at a 15% capital gains tax versus 20, 25, 30, who the heck knows in 2013. so why would i want to sit on gains now if, in fact, i'm going to be taxed much higher next year? >> that's the keyword, taxes. we can talk about the ebb and flow of the markets all we want, but at the end of the day, it's about how do you evade the tax man? we know what the concerns are as far as dividends go. dividend taxes are going to go up. there was a big rumor going around that a lot of other investments were going to get hit, one of them being master limited partnerships. those are the partnerships that get preferential tax treatment if they have 90% of their revenue that comes from real estate, natural resources, and commodities. they had been selling off. my sources telling me now that the cliff negotiations are not going to cause a hit to the preferential tax treatment of mlps.
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i think this is a great way to derive income and to avoid some tax hit no matter which way the market flows. some of the big players, magellan and vanguard. keep a real close eye on these things. as these dividend stocks start te selling off, you're going to see these names do well. >> michael, what about the dividend play? that has been a great interest to investors looking desperate for some sort of income here. now they're going to have to pay the tax man at some point. so do you sell now or to marimas questions, do you wait until next year? >> we used to have a saying in public accounting. don't let the tax tail wag the business dog. if you're a long-term business investor, and i think there's a lot of pent-up demand. equities in the long term may be undervalued. if you need cash, you need to sell, then now's the time to do it. you may transition to lower
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dividend paying stocks versus higher dividend paying stocks. again, you're looking at the total return of equities over the long term. that's one thing you can do to manage your position going forward. i don't think just because taxes are going to go up you want a wholesale get out of equities. i would agree with craig there's got a opportunities out there. >> i think it's a hard call to say whether equities are overvalued or undervalued. you're putting your eggs in the basket of this 2.7% gdp number that i don't think is going to last. the internals of it were not very good. if you have a market that we get back to recession or, you know, 0.5% growth or something like that, then i don't think you can make that argument that equities are undervalued or fairly valued. >> i'm looking at a valuation of about 13. on that level -- also given the fact a lot of individuals are out of the market, it's a fair valuation. >> craig, weigh in here. if you're looking at 2013, you're not only considering
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taxes because we know the capital gains and dividend taxes will go higher. you're also talking about the possibility of a much slower economy. and how does that impact earnings in 2013? let's say hypothetically we go off the fiscal cliff because clearly both sides are digging in. here we are at the edge once again like last summer. we go off the fiscal cliff. 2013 comes. we go into recession. doesn't that hit corporate earnings, which, of course, has been the best part of this recovery anywhere? >> there's no question about that. i would contend that the market has probably already factored most of that in. when you can buy a number of stocks -- in the hodges small cap fund, we have a number of stocks trading below their growth rate. that's telling you that the market is not expecting good growth. when you can buy stocks that are growing at 20% a year at ten times earnings, that's a good valuation. there are a number of those
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situations there that we're seeing left and right. >> got to go, guys. >> okay. >> sorry, jeff. you know how that works. you guys on the website, you get unlimited amount of space. just go on. >> tell me editor. >> i know. >> thanks, guys. see you soon. let's get over to jackie deangelis with a quick market flash. >> hey, there. watching shares of super value tanking on a headline that talks have stalled. reportedly struggling to get financing for a super value deal. that's according to bloomberg. super value has been considering a buyout deal after it's facing strong competition, forcing them to close stoores and cut costs. take a look at the chart today. it's down about 16%. it's also the worst performer on the s&p year to date. back to you. >> all right, jackie. thank you very much. what do you think, maybe nancy pelosi will wait until after the market closes. >> since this market is trading on every headline. >> we're waiting for her to --
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maybe she's still meeting with tim geithner, the treasury secretary. when that meeting ends, she's to come out and make her comments on where she believes we are in the negotiations on the fiscal cliff. when that happens, we'll take you there live. meantime, the market is heading higher again. up 42 points on the dow. >> how are the wealthiest americans preparing for a possible fall off that fiscal cliff? we'll look at that next. also, chevron ceo is warning a fall off that cliff would have major ramifications for his business. we'll hear from him exclusive later on "the closing bell." stay tuned. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time.
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well, there it is. the live picture of the podium where we're going to be hearing from nancy pelosi in just a moment. we're waiting for her to finish up a meeting with timothy geithner, the treasury secretary, about fiscal cliff issue and how to avoid going over the cliff. as soon as fan si pelosi comes out, we'll take you there live. >> meantime, we have talked a lot about how investors are preparing for the fiscal cliff.
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our wealth editor looks a what the richest citizens are doing with their money. >> millionaires are racing to take as much income this year ahead of next year's possible tax increases. that includes taking dividends, selling real estate, and selling private companies. george lucas, of course, sold his company to disney for $4 billion, possibly saving up to $200 million in capital gains tax if he closes before year end. real estate is another area. a broker in miami tells me the sale of a $38 million home there was recently driven in large part by taxes and the seller's desire to close this year. now, the dividend tax could nearly triple next year, and more than 100 companies have declared dividends this year alone. the savings can be huge. sheldon adelson is getting $1.2 billion from that special dividend in his company. he pays a tax of $180 million this year. next year, that could be $520 million. so his potential savings alone,
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$340 million. the walton family saves a potential $180 million with that walmart special accelerated dividend of theirs. now, this isn't to say these tax hikes will happen or the rich know something we don't. of course, as your guests just mentioned, taxes shouldn't be the primary reason to sell. with that kind of savings, bill, it's not worth taking the risk. >> or you can be like george lucas. when you sell the company for $4 billion, just give the $4 billion away. >> exactly. and a little bit nicer to give it to a philanthropy than the government. >> exactly. thank you, robert. >> see you later. up next, we have the closing countdown. we have a market up 38 points on the dow industrials. >> so, maria, would you rather have a dollar bill or a dollar coin? that's the question being asked. >> i want the bill. >> you want the bill still? >> yeah. >> guess what? the dollar bill could be in danger being replaced by the dollar coin. we're going to meet one of the people advocating for the switch, and they're saying it could help fix the debt
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situation. >> maybe i do want the coin. you know what? >> it's a very handsome piece. and it's worth the same as this. >> yeah. maybe the coin isn't so bad. we'll talk about it. >> you may keep that. >> i'm changing my mind as we speak. >> we'll be back. i always wait until the last minute. can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery.
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all right. apparently nancy pelosi, the minority leader in the house, is going to wait until after the close to make any comments about the fiscal cliff. but the market's been moving anyway. i mean, take a look at today. again, it's another day where wall street is fixated on washington. you had decent gdp data this morning. they revised the latest quarterly data upward. that gave us a nice little rally until speaker boehner came in and said he was disappointed in the progress, that no progress had been made between the house and the white house in the last two weeks. that sent the market lower. then harry reid said, well, with we all know where we stand at this point. chuck schumer of new york said he was convinced we would have a deal by christmas. that brought the market back. we were up 40, 50 points at that point. now we've been doing a little stutter step waiting for nancy pelosi. that doesn't look like we're going to get anything in the
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meantime. ben willis, you've been trading this market well the last couple weeks here. are you trying to trade the fiscal cliff rhetoric? what do you do here? >> you have to buy the dips. when they step in front of the camera and make those cameras, you have a dip to the downside. that's a buying opportunity for particularly long-term investors. traders like me love the volatility. you get ten-handle swings in the s&p, it makes for a great day. >> i get the notion that you want to buy to get past the cliff, but what about the idea that we are heading for a slow-growth economy next year anyway? corporate profitability growth has been slowing down this year, each successive quarter. so what's to push this market higher in 2013? >> i think the fact of the matter the economy, nonetheless, is improving. it's not the speed we want it to improve. i think if you look at the pe ratio on the s&p compared to any other asset classes, it's a place you need to have exposure. i think most people, their ex
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expoture on the u.s. government treasury frightens me to no end. >> as long as the fed is keeping long rates low -- >> they aren't officially buying that market. that's a dangerous market to be in. >> do people then start reaching for yield and buying things they have no business buying like a preferred or some high-yield bond of some kind that carries over a risk? >> yes, i think the big risk to any individual investor eventually is going to be the up side risk on interest rate structure. the u.s. government has been the 800-pound gorilla in the bond market. i believe they're artificially suppressing those interest rates. when those start to move, i think it will be a move most people are not prepared to undertake. >> what do you think we do tomorrow? >> well, depending on what nancy pelosi says, i still they we're up -- i think we made a little more pullback on this volatility. i think the trend to the end of the year is to the up side. play for the long side. >> as we learned from eamon javers,

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